Firing on all cylinders: Can DSK Motowheels win the superbikes race in India?

The company, which sells Italian and Korean superbikes Benelli and Hyosung in India has taken to country roads in a big way. Can the move take it home?Rajiv Singh | ETBrandEquity | July 06, 2016, 07:32 IST

Take me home, country roads..." legendary singer-songwriter John Denver could have never imagined that an American chartbuster would find echoes in of all things, the marketing strategy for highend bikes. But that's precisely what has happened in 2016. Ask Shirish Kulkarni, who has taken to 'country roads' in a big way.

"The demand for superbikes in tier II and III towns and cities has seen a 60% surge over the last year or so," claims the chairman of DSK Motowheels which sells Italian and Korean superbikes Benelli and Hyosung in India. While metros account for 60% of sales of 250cc to 1130cc superbikes that carry an entry tag of Rs 2 lakh and go up to Rs 12 lakh, 40% comes from tier II, III and IV areas such as Indore, Siliguri, Bhubhaneswar, Jaipur, Vijayawada, Aizawl, Dimapur and Imphal. Overall, DSK Motowheels sold 3,400 units in 2015-16 and has set a target of 5,000 units for the current fiscal.

Pune-based DSK Motowheels, which is part of Rs 5,000-crore DSK Group conglomerate, entered into a joint venture with QJ group from China to bring legendary Italian superbike brand Benelli into India. Earlier in 2012, it tied up with South Korean brand Hyosung to sell its superbikes as well.

For Kulkarni, the trigger for focusing on smaller cities and towns was on realising a few home truths: First, such places comprise a huge but untapped market. The latent demand was always there but there was no adequate supply. The rising disposable incomes and heightened exposure of customers also made Kulkarni realise there's gold at if not the bottom, the middle of the pyramid.

"Moreover, our superbikes are competitively priced. This has led to our success in these newly-lucrative markets," he says, adding Indian consumers are more comfortable between price range of Rs 2 lakh and Rs 6 lakh. Branding and marketing experts contend that DSK Motowheels has hit on a smart strategy. While the other superbike makers are going down the pyramid of rich urban India before penetrating the rich rural India, DSK has done it differently, says brand strategist Harish Bijoor.

"DSK has read the market right," he says. From a pure marketing perspective, there is a Big India, and then there is Little India. Big India is really rural India that lives in 6,43,750 villages, explains Bijoor. The top end of this classification starts somewhere at the top of Rurban and rural India. These are the Tier 2, 3 and 4 towns. Out here, prosperity is a reality that has often been overlooked. "Upgrading from the regular bike to the irregular bike is a fetish with the rich in these towns," he adds.

The idea of ownership is clear. There is the middle-class tier II guy who owns the regular brands, and then there is the rich tier II guy who will not be seen with a 'common' bike. "For him, the DSK offering is the right fit," reckons Bijoor. If the offering is something that tickles their fancy, they part with money for the best of brands and services, he adds. Auto experts too are not surprised to see a spike in demand.

"Bharat is equally, if not more, aspirational than India," says Abdul Majeed, Partner at PwC. The big businessmen and rich farmers from rural India frequently travel to top cities. So exposure has kindled a desire for a lifestyle which matches with their wealth and status he adds. Another factor, which has given a big push is improvement in rural infrastructure, combined with good finance schemes available to the aspiring population.

The fundamental difference between DSK and other bike firms is one of focus and offerings: While others have too many offerings and try to cater to all segments, DSK has been targeting niche. "Urban demand is not going to there for long. It is going to get saturated," contends Majeed. So, all high-end bike manufacturers are making a constant effort to reaching out to the rural population by expanding dealership. "The future is going to be the hinterland," he says.

But how do you get an audience to fork out cash for bikes that even people in metros are not all that familiar with? From test rides to frequent road trips to special displays across malls, the company has been undertaking a range of below the line activities to create a deeper engagement. DSK has set aside 30%-35% of its marketing budget for non-metro areas, informs Kulkarni.

While DSK Benelli has 16 showrooms across India, including Indore, Kochi, Coimbatore and Jaipur, DSK Hyosung has taken its numbers to 31 with stores in Visakhapatnam, Hubli, Agra, Luck now, Patna, Raipur and Ranchi.

DSK is planning to expand its reach in tier II and III towns by opening 14 more showrooms this fiscal, adds Kulkarni.

Though DSK has moved early to make most of demand in smaller towns and cities, auto experts reckon that servicing will pretty much be the point at which the rubber hits the road. Even the most br a nd c on sciou s consumer will be put off at the prospect of a 100 km ride just for servicing.

Another challenge, Majeed points out, for the brand would be to ramp up its distribution network. "How are you going to sustain it? That's equally crucial." Well, Kulkarni might have hit the country roads. But it's too early to say whether they will take him home.